Century unlikely to drill oil well Border rows seen as key factor By Andrew Richards Stabroek News July 31, 2000 The drilling of an oil exploration well by Century (Guy) Ltd in its offshore concession has been stayed as a consequence of the ongoing border disputes between Guyana and its neighbours, which have led to companies adopting a cautious approach. "The now famous border controversy over drilling in Guyana's territory by CGX, has resulted in a dry hole at a low priority site [Horseshoe West] and an opportunity to test areas off the north-west district by Century being delayed indefinitely," manager the Petroleum Division of the Guyana Geology and Mines Commission, Newell Dennison, revealed on Friday. Dennison made the statement during the presentation of a paper on Guyana's petroleum quest at the two-day conference on mining and quarrying held by the Guyana Geology and Mines Commission (GGMC) at the Ocean View International Hotel. The conference ended on Friday. Chairman of GGMC, Robeson Benn, who chaired Friday morning's session, said that peaceful agreements with the neighbouring countries were fundamental in the quest for petroleum in Guyana. He underscored the need to resolve disputes both internally and externally to put the country on the path to development. "The quest will not be abandoned. We presently have a temporary setback which provides us the opportunity to settle the border disputes," Benn stated. Century was supposed to drill a well since last year but encountered some problems including the lack of a suitable rig. The company has under a year to exhaust its licence, which it will most likely relinquish given the uncertain state of affairs. The contentious border issues along with the militaristic overtures by the Surinamese government have caused oil exploration companies to be cautious about their exploration plans, presentations made at the conference said. Last year Venezuela had protested against the granting of a licence to Century, claiming that the company's concession overlapped Caracas's waters. On June 3, Surinamese gunboats ejected a CGX rig from its site in Guyana's waters and five rounds of talks between the two countries failed to yield a solution. Dennison said GGMC had negotiated petroleum agreements and licences which were awarded in November 1997 to Century and Maxus (Guy) Ltd. Licences were also granted to CGX Resources Inc in June and December 1998 and Exxon in June 1999. New seismic data was acquired over sections of the adjacent licence areas of Maxus and CGX in April last year, he said. An aeromagnetic survey was done in February by Exxon. Delivering a paper on 'Measures of Promoting Petroleum Exploration in Guyana', Nicholas Chuck-a-Sang, of GGMC's Petroleum Division, observed that the best plans were left at the mercy of external factors which included border issues. He noted that there had been about 40 years of oil exploration in Guyana but only 23 wells had been sunk. In comparison, Venezuela and Trinidad and Tobago--both with thriving petroleum industries--and to a lesser extent Suriname, had put down hundreds of wells, resulting in major oil production. Chuck-a-Sang stated that Guyana had to find ways to increase drilling activities and to adopt a proactive policy to woo investors. The Petroleum Division has embarked on a series of overseas promotions for exploration in the Takutu Basin. A website will be launched next week to provide promotional support. The site will have information on investment opportunities, border issues, geology, contracts, Guyana's culture, and legislation. According to Chuck-a-Sang, though there had been no involvement locally in the oil exploration area--mainly due to the inability to raise the necessary finance--there were small-scale contracts available for local investors in the onshore basin. GGMC could facilitate the local investors by offering drilling programmes funded by shares offered to the public, he said. Tax relief schemes and technical assistance could also be provided, he added. Dennison, too, noted there had been no petroleum discovery on record and the country had remained in an exploration mode after several decades. He pointed out that no policy existed to address the utilisation of benefits from petroleum resources in the event of commercial success and stated that discussion was vital to the development of such a policy. "This is a country burdened with economic hardships. These hardships are sometimes compounded by encumbering policy restraints from donor agencies and financial arrangements from lending institutions," Dennison stated. As a result, it may be easy for some issues--such as a petroleum policy--to be overlooked since it was not seen to be immediately impacting. He suggested that any statement on policy for the utilisation of benefits from the petroleum sector be mindful of external factors since economic stability and progress must be within the context of the global village. Follow the goings-on in Guyana in Guyana Today